The Debt Ceiling Fraud
Politicians use smoke and mirrors for “the debt ceiling” fraud.
Most people are familiar with the incorrect nomenclature of “the debt ceiling”. However, what is known as the nation’s national debt is nothing more than its outstanding US Treasuries. Not debt.
The United States government is a sovereign currency issuer of the globally recognized, U.S. $ (dollar). Before President Nixon removed the dollar from its relation to the gold standard, in 1974, the government would issue its currency by selling treasuries equivalent to the deficit spending as it was required to. Our government and the current fiat monetary system is now backed by only the faith in the stability of the government issuing the currency itself, and not by gold or silver or any other material of value.
The deficit of the nation is simply a balance sheet showing that we have more of the dollars in circulation on the spending column that the country shows in its tax returns from its people and businesses. Simple. The government doesn’t tax enough to cover the outstanding treasuries that are out in the system. The average citizen pays approximately 30% in taxes, while wealthy citizens and corporations are allowed to minimize their tax burden to zero. One good example is the “billionaire”, ex-twice impeached, President Trump who, it is now known, pays zero taxes. Our government has no problem with being able to afford anything it needs for the country and its citizens. It can print its own money to do it. The problem lies in how the government then decides to levy taxes in its attempt pay back itself for the money it printed.
The mass media corporations create this hysteria every year which helps facilitate fear among the citizens, while the mis or dis-informed politicians from both sides of the two headed snake, we call our government, play with something most clearly don’t truly understand to the possible detriment of the country. The party line message from the right is to cut integral societal programs, rather than tax those who don’t pay taxes but fund the politician’s coffers for re-election. The message from the left is to tax those who don’t pay taxes so they pay their fair share.
The Fourteenth Amendment of the Constitution clearly states in Section 4 that the “..validity of the public debt of the United States shall not be questioned.” So, the uninformed politicians are not protecting the Constitution as they were sworn in to do so by this constant badgering about a theoretical thing called a debt ceiling.
The United States government does not “borrow” money. It creates it. There is absolutely no relation to how you balance your home budget or your businesses budget and how the government’s money system works. They are not the same at all. The government doesn’t borrow any money, it prints its own money. It is illegal for you to do so. The government has an endless supply because of this, you don’t so you must balance a budget of a limited supply verses your family or business’s demands. You cannot think of the government in the same terms of household debt. They are nothing close to the same.
The answer to the national debt is not to cut programs like Medicare, Social Security or fixing bridges and roads. There are much better functioning societies in other countries throughout the world where they are able to afford all of these social programs. The answer for the United States lies in taxing those who profit from the system in a relative manner associated with the profit acquired. Period.
Dollars are issued by the government in order to provide for itself and its citizens. Then those securities are not a debt, but currency still outstanding in the system. Taxes do not “pay” for anything whatsoever. Taxes are solely used to remove previously issued outstanding securities that remain in the system. If the government wanted to fix all of the roads, end child hunger in schools, deliver free education, and more, it can by simply doing so and printing the money to do it. Then the task is to simply make the corporations, as one example, many of who profit into the multiple billions every quarter to pay more taxes. Rather than paying zero. Period.
It’s just simple math.
Nice post. I agree that by leveraging the tools the current US monetary system has, creating currency is technically a feasible way to effectively eliminate the commitments (outstanding Treasuries as you call them) and get rid of the debt ceiling debate. The questions/concerns I have about this are, 1. Would this not cause inflation if we aren't able to tax an equivalent amount of money out? (which will be politically infeasible IMO), 2. Wouldn't this drastically centralize control of investment because one entity can create money and spend it where they see fit? I get that hypothetically investment targets would be subject to voters... but that's not reality today. This feels undemocratic to me. 3.